Business
How Reddit Trolls Cost Hedge Funds $6 Billion
The GameStop Stock Saga has some hedge funds licking their wounds while smaller independent traders reap the benefits.
When it comes to financing, there is no accounting for the power of Reddit. Some hedge funds learned this the hard way last month when a group of retail traders organized on the subreddit, WallStreetBets bet against a short sell of the company GameStop. Now that the dust has settled, let’s breakdown what happened in this epic showdown between Wallstreet and internet trolls.
It All Starts with GameStop
GameStop is a video game retail store with over 5,000 stores across the United States. They specialize is selling new and used video games and equipment along with some novelty toys and merchandise. It seemed that GameStop was on the downward trend over the last year. With less people shopping in malls, Xbox and Playstation introducing digital only consoles, and COVID-19 lockdowns, GameStop business was on the decline.
In September of last year, investor Ryan Cohen bought a 13% stake in the company and pushed them to move their business to an online model. That’s where the hedge funds came in. Eagle-eyed investors saw this as a sure-to-fail gambit and moved to short the stock.
What is ‘Shorting a Stock’?
Contrary to traditional investing, shorting a stock is how traders look to make money off a stock’s failures rather than success. An investor will borrow the stock of a company from someone when they anticipate a price drop. They sell it and repurchase it once the price goes down and keep the profit minus some interest.
In other words . . .
Suppose Kevin has 100 oranges and the going rate for oranges is $2 apiece. Kevin’s friend Max borrows 10 oranges from Kevin and turns around to sell them all right away for $2 an orange, totaling $20. After a couple of days, the price for oranges drops to $1, so Max goes out and buys 10 oranges for $10. He then returns the oranges to Kevin, making a cool $10 profit in the process.
This is short selling in a nutshell.
Short selling is something that happens all the time on the stock market. It is perfectly legal and, in fact helps regulate the prices of particular stocks. There is a catch, however.
In the case of the oranges – what happens when Max sells the oranges he borrowed from Kevin, and instead of the price dropping later, the price goes up? Now, Max has to spend $3 on an orange. To return the oranges to Kevin, Max has to spend more money than he made and lose $10 for his efforts.
The Showdown
When some big hedge funds eyed the downward trend of GameStop, they decided to short the stock. They borrowed many shares from the company’s shareholders and sold them immediately in anticipation of the price drop.
Enter Reddit
A subreddit group, wallstreetbets caught on to the GameStop short and decided to band together and apply a ‘short squeeze.’ They used their clout to urge amateur investors across the internet to purchase stock in GameStop, declaring a fight against the big Wall Street firms.
When the subreddit and their legions bought up all the GameStop stock, the price shot through the roof. On January 12th, GameStop was trading at $19.95/ share. In two days, it nearly doubled. By January 25th, the stock had jumped to $76.79, and on the 27th, it was trading higher than TESLA at $347.51.
Forced to buy back at over a 1,500% increase, the short-selling hedge funds lost big time. Melvin Capital Management lost 30% of the $12.5 billion it was managing. The Guardian estimates, the Redditors cost hedge funds upwards of $6.12 billion.
On the flip side, many of the Redditors and amateur traders stood to make an exorbitant profit if they sold at the right time. Some traders claimed to have made $11 million in the whole ordeal by buying low and selling high.
Behind The Madness
Wallstreetbets claims the short squeeze was implemented as a way to stick it to the big hedge funds. It was seen to be class warfare, with many angry with the big-time traders making money by manipulating the market in a way that the little guy couldn’t.
It wasn’t just the internet trolls. Elon Musk got in on the action, driving up the GameStop stock with a single tweet.
The Aftermath
Trading had sky-rocketed in an unprecedented way. Robinhood caught heat for temporarily suspending the trading of GameStop. They claimed it was because they did not have the capital to back the trades. Notifications on the app warned traders of the dangers of short-selling.
Some criticized the app for cutting out the little guy during a historical time to make money.
GameStop has since returned to more modest trading but still trading significantly higher than it was at the beginning of the year. Robinhood has reopened trading to GameStop and issued a statement explaining their actions.
No doubt, big time hedge funds are weary to tick off the wrong people with their next short.
Graphic design subscription services like No Limit Creatives are popular among small businesses to get quick and quality designs. However, just like any other platform, it has its downsides. So, if you’re looking for No Limit Creatives alternatives, here is a list we made to help make the job easier for you.
Penji — Best Overall Alternative
If you’re looking for a reliable graphic service from start to finish, Penji is a great alternative. Penji significantly improves upon the things that No Limit Creatives lacks in comparison — turnaround time, user dashboard experience, and offers a consistent designer who helps your brand over time.
Why it Stands Out:
The biggest issues with No Limit Creatives are slow turnaround times and designs that lack brand cohesion. With Penji, you get consistent communication, consistent pricing, and over 120 design types without all the hassle.
Pros:
- Quick turnaround time (24-48 hours)
- A designer learns your style
- Easy user dashboard
- Consistent monthly pricing with no hidden fees
- 120+ types of designs (ads, branding, web, social, and more)
Cons:
- No communication through chatting with the designers
- No video/animation capability
GraphicsZoo — Best for Revision and Version Tracking
GraphicsZoo is a good alternative if you want more say in your revisions and need brand consistency across the board. GraphicsZoo can help with easy version tracking, making team collaboration simple.
Why it Stands Out:
If you’re struggling to get changes made or keep things on brand, GraphicsZoo gives you the tools necessary to do so.
Pros:
- Tracks versions and revisions in detail
- Team collaboration made easy
- Dedicated Design Team
Cons:
- Turnaround may vary depending on order
- The interface could be more modern
Content Beta — Best for SaaS and Tech Brands
If you’re a software or tech company that needs more modern design visual offerings like product explainer videos, UI design mockups, and onboarding videos, then Content Beta works best for you. Unlike No Limit Creatives, which primarily focuses on graphics, Content Beta specializes in design and video.
Why it Stands Out:
If you’re working on product videos, app UI, or anything tech-related, this is the choice for specialized help.
Pros:
- UI/UX combined services
- Great for explainer videos of products
- Video/design in one package
Cons:
- Non-ideal for basic branding or print materials
- Could be costly for smaller teams
SmartSites — Best for Marketing + Design Services
SmartSites is a marketing agency first and foremost. They provide SEO/PPC/web services along with graphic design so if you’re looking for heavy assistance in creative strategies as well as marketing brands and messaging, SmartSites is a suitable match.
Why it Stands Out:
If you want design solutions with tangible marketing results, then SmartSites provides you the growth potential to back it up.
Pros:
- Agency full-service: design/se0/PPC/web solutions
- Good for branding long haul
- A lot of strategic thinking help
Cons:
- Not unlimited graphic designs subscription program
- Should avoid if you only need design work
TLDR: Penji is the best graphic design service for startups because you get unlimited designs, 24-48 hour turnarounds, and flexible pricing that won’t drain your budget. Unlike premium agencies or inconsistent freelancers, Penji scales with your startup.
The best graphic design service for startups is Penji. For $499/month, get unlimited design requests delivered in 24-48 hours with a dedicated team that understands startup urgency. No contracts, no per-project fees, just reliable design support.
Startups burn through design work fast. One week, you need social posts. Next week, you’re updating your pitch deck. Then suddenly, you need a one-pager for investors. Freelancers cost too much per project, and full-time designers? Not in the budget yet. Here’s the graphic design service for startups that comes in, giving you unlimited work for predictable monthly costs.
Top Design Services Startups Actually Use
1. Penji
When you’re hunting for the best graphic design service for startups, you need speed, variety, and affordability all at once. Penji nails all three. Their design as a service platform gives you unlimited designs for $499/month with 24-48 hour turnarounds.
Why Penji works so well for startups:
They handle everything. Logos, pitch decks, social campaigns, you name it. No per-project charges. Your monthly rate stays flat whether you submit two requests or twenty.
Your dedicated team at Penji learns your brand fast. They remember your preferences for future projects instead of treating every request like the first time.
The creative support scales from simple graphics to complete brand guides. You don’t get forced into higher pricing tiers when your needs grow.
No contracts. You can pause when cash is tight and restart when you’re ready. Perfect for unpredictable startup budgets.
Startups choose Penji when they need graphic design services that match their pace without the agency price tag.
2. Superside
Superside brings agency-quality work through a subscription model. They’re great if you’ve raised significant funding and need premium creative for major campaigns. But plans start around $3,000-$5,000 monthly. Too steep for most early-stage startups.
3. Kimp
Kimp offers subscription design with multiple tiers starting around $500/month. They’re decent for basic needs. The catch? Turnaround times can stretch to 48-72 hours, and their design variety feels more limited than what Penji offers.
Conclusion
The best graphic design service for startups matches your speed and budget without compromise. Penji’s graphic design services handle everything from quick social posts to complex branding work. All for one flat monthly rate that makes financial planning actually possible.
Get Design Support That Moves at Startup Speed
Try Penji today and see why thousands of startups trust them for unlimited design work. Get your first project delivered in 48 hours.
Frequently Asked Questions
Why is Penji better than hiring a freelancer?
Freelancers charge per project and often have slow turnarounds. Penji gives you unlimited designs for one flat monthly rate with 24-48 hour delivery. No chasing invoices or waiting for availability.
How much does Penji cost compared to other services?
Penji starts at $499/month for unlimited designs. Superside costs $3,000-$5,000 monthly. Quality freelancers charge $100-$200 per project, which adds up fast when you’re launching.
Can I get revisions with Penji?
Yes. Unlimited revisions are included in your monthly subscription. Keep requesting changes until the design is exactly what you need.
Graphic design is a huge part of managing an ecommerce business. It attracts prospects and website visitors, builds a strong brand identity, and establishes authority and credibility. If you want your brand to possess all these, you need to explore these five best graphic design services for e-commerce businesses:
Penji
A leading name in the graphic design subscription landscape, Penji offers unlimited graphic design and revisions for a flat monthly rate. This allows ecommerce businesses to get all the landing pages, ad creatives, product packaging, and other visuals they need without breaking the bank. Penji also offers a quick turnaround time of 24 to 48 hours, making it ideal for multiple product launches or regular email campaigns.
Flocksy
Boasting a team of designers, writers, and video editors, Flocky is an excellent option for ecommerce businesses looking for a reliable design partner. Like Penji, it delivers within 24 to 48 hours with fixed-rate pricing plans. Also included in the plans are unlimited revisions, so you can get the exact designs you need.
ManyPixels
Another graphic design subscription platform that’s built for ecommerce businesses, ManyPixels lets you send as many design requests as you can in a month. Its higher-tier plans match you with a dedicated designer to provide consistent visual assets for your online store.
Duck.Design
Whether your business is on Amazon, Shopify, or DTC (direct-to-consumer), Duck.Design is an excellent graphic design service for ecommerce businesses. It also offers unlimited graphic design services for flat monthly rates. Like ManyPixels and Penji, it delivers in 1 to 2 business days.
DotYeti
A rising start in the unlimited graphic design landscape, DotYeti is well-suited for ecommerce businesses looking for quality, fast, and affordable designs. You can send requests for infographics, packaging design, landing page designs, ad creatives, and many more.
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